Krungsri Securities (KSS) maintains a “Buy” recommendation on AP (Thailand) Public Company Limited (SET: AP), despite revising down its 2026 net profit forecast by 8% to THB 4.5 billion, reflecting a modest year-on-year growth of 5%. The adjustment comes as heavy price promotions and anticipated cost increases are expected to weigh on gross profit margins (GPM), with the 1Q26 GPM projected to decline to 30% year-on-year and quarter-on-quarter.
The brokerage forecasts 1Q26 net profit at THB 900 million, marking a 4% increase from the prior year but a 30% drop from the previous quarter. Growth is primarily attributed to a 21% YoY surge in revenues, driven by robust low-rise and condominium transfers. However, promotional activities are pressuring margins, resulting in net profit coming in slightly below previous estimates.
Looking ahead, KSS expects 2Q26 net profit to recover QoQ and remain stable YoY, backed by continued condominium transfers and new low-rise project launches. While higher transfer volumes underlie the 2026 profit outlook, persistent margin pressure is anticipated due to rising construction costs, largely attributed to the ongoing Middle East war situation.
The target price for 2026 has been lowered to THB 10.10, reflecting the revised earnings estimate. Nevertheless, Krungsri highlights AP’s leading market share, scale advantages, and competitive pricing strategy as supportive of long-term growth and sector-leading earnings expansion. The brokerage underscores the attractive 2026 P/E of 6.4x, reaffirming its positive long-term view on the stock.
